COF Insurance & Reimbursement 3 — Questions and Answers
Question 1: A patient has Medicare as primary and Medicaid as secondary insurance. Which payer must be billed first?
- Medicaid, because it covers more services
- Medicare, because it is always primary over Medicaid (Correct answer)
- Either payer, based on the provider's preference
- The payer with the higher reimbursement rate
Correct answer: Medicare, because it is always primary over Medicaid
Medicare is always primary over Medicaid; Medicaid acts as the payer of last resort and only covers costs remaining after Medicare pays.
Question 2: What is a Local Coverage Determination (LCD) and how does it affect orthotic billing?
- A contract between the local orthotist and a regional payer
- A Medicare Administrative Contractor's policy defining when a specific item is covered in their jurisdiction (Correct answer)
- A state law regulating orthotic device pricing
- A hospital's internal policy on orthotic dispensing
Correct answer: A Medicare Administrative Contractor's policy defining when a specific item is covered in their jurisdiction
An LCD is issued by a Medicare Administrative Contractor (MAC) and establishes coverage criteria and ICD-10 diagnosis codes that support medical necessity for specific items.
Question 3: When billing Medicare for a custom-fabricated orthosis, which modifier is typically required to indicate the item was custom-made?
- Modifier -KX (Correct answer)
- Modifier -KL
- Modifier -KE
- Modifier -KF
Correct answer: Modifier -KX
Modifier KX is appended to indicate that the documentation on file supports the medical necessity requirements specified in the LCD.
Question 4: What is the significance of the 'certificate of medical necessity' (CMN) for orthotic claims?
- It replaces the need for a physician's prescription
- It is a standardized form some payers use to document and certify medical necessity for specific DME items (Correct answer)
- It is only required for Medicaid claims, not Medicare
- It authorizes the patient to self-refer to an orthotist
Correct answer: It is a standardized form some payers use to document and certify medical necessity for specific DME items
A CMN is a standardized form used by CMS for certain DME items to document that the item is medically necessary for the patient.
Question 5: A commercial insurance plan denies an orthotic claim stating the device is 'not medically necessary.' What is the appropriate first step?
- Write off the balance and do not bill the patient
- Submit a formal appeal with supporting clinical documentation (Correct answer)
- Bill the patient the full amount immediately
- Resubmit the claim with a different diagnosis code
Correct answer: Submit a formal appeal with supporting clinical documentation
The appropriate response to a medical necessity denial is to file a formal appeal with the clinical documentation supporting the physician's order.
Question 6: Under the Medicare Competitive Bidding Program (CBP), which category of orthotic items is currently included?
- All custom-fabricated orthotics
- Off-the-shelf knee braces and other specified off-the-shelf orthotics (Correct answer)
- Only prosthetic devices
- All L-coded items regardless of custom status
Correct answer: Off-the-shelf knee braces and other specified off-the-shelf orthotics
Certain off-the-shelf orthotics, such as knee braces, are included in the Medicare Competitive Bidding Program in designated competitive bidding areas.
Question 7: What does 'assignment' mean when a Medicare-participating provider accepts it for an orthotic claim?
- The provider assigns the claim to a third-party billing company
- The provider agrees to accept Medicare's allowed amount as payment in full (Correct answer)
- The patient assigns their benefits to an out-of-network provider
- The provider assigns a specific HCPCS code to the claim
Correct answer: The provider agrees to accept Medicare's allowed amount as payment in full
Accepting assignment means the provider agrees that Medicare's allowable amount is payment in full and cannot balance-bill the patient beyond the standard copay/deductible.
COF Insurance & Reimbursement 3
A patient has Medicare as primary and Medicaid as secondary insurance.
Which payer must be billed first?